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GT Advanced Technologies Inc. Announces Results for Fourth Quarter and Fiscal Year 2013
MERRIMACK, N.H., Feb. 24, 2014 (GLOBE NEWSWIRE) -- GT Advanced Technologies Inc. (Nasdaq:GTAT) today reported
results for the fourth quarter and fiscal year 2013, which ended December 31, 2013.
Management Commentary
"Our results for the December quarter were in line with our guidance and the anticipated growth trajectory of our business
remains unchanged," said Tom Gutierrez, president and chief executive officer. "We expect to return to profitability during the
second half of 2014.
"Our arrangement to supply sapphire materials to Apple is progressing well and we started to build out the facility in Arizona
and staff the operation during the quarter," said Gutierrez. "We are pleased to have Apple as a sapphire customer and to be in
a position to leverage our proprietary know-how to enable the supply of this versatile material. While our primary focus during
the balance of the year is to continue to execute on our commitments in Arizona, our aim is to position GT not only as an
exceptional sapphire supplier to Apple but also as an unparalleled world-class supplier of sapphire material and equipment to a
variety of customers.
"Although we have significant opportunities in sapphire, the GT story is not only about our emerging sapphire materials
business. In fact, our entry into sapphire materials may enable us to expand into other materials segments once we have fully
ramped the operation in Arizona. The many diversification and investment seeds we have planted over the last several years in
the LED, power electronics, advanced solar and industrial markets are expected to begin to bear fruit over the next 18 months.
We are seeing significant interest in our new products and now expect equipment orders from these initiatives to be received
during the latter part of 2014, with meaningful revenue recognition beginning in early 2015.
"During the last year, we worked to ensure that our balance sheet continues to provide us with the strategic and operational
flexibility necessary to take advantage of the many growth opportunities that we have identified," concluded Gutierrez.
Fourth Quarter and Full Year 2013 Financial Results
During 2013, the company made the strategic decision to forego ASF equipment sales while building out its new sapphire
materials capacity. This decision has had, and will have, a clear negative impact on the company's fourth quarter and full year
results for 2013 and near term future results.
Revenue for the fourth quarter came in at $32.6 million including $2.5 million in polysilicon, $11.3 million in photovoltaic (PV),
and $18.8 million in sapphire. This compares to revenue in the third quarter of $40.3 million and $102.3 million in the fourth
quarter of fiscal 2012. Revenue for the year ended December 31, 2013 was $299.0 million compared to $733.5 million for the
year ended December 31, 2012.
Summary results for the quarter and year are presented in the table below:
Three-Months Ended
Revenue
Dec 31st,
Sept 28th,
Dec 31st,
2013
2013
2012
$32.6
$40.3
$102.3
Full Year
Dec 31st,
2013
$299.0
Dec 31st,
2012
$733.5
Gross Margin
9.3%
44.1%
(40.2%)
31.1%
28.1%
GAAP EPS
($0.33)
($0.31)
($1.34)
($0.71)
($0.53)
Non-GAAP EPS
($0.26)
($0.16)
($0.15)
($0.35)
$0.73
concurrent common stock and convertible debt offering in December 2013 that resulted in net proceeds of approximately
$290.0 million. The company also paid off an outstanding term loan of $96.0 million.
As of December 31, 2013, the company's total backlog was $602.2 million comprised of equipment orders only. This included
$298.7 million in the polysilicon segment, $11.3 million in the PV segment and $292.1 million in the sapphire segment. New
orders during the fourth quarter of calendar 2013 were $23.8 million. The company adjusted backlog down by approximately
$47.3 million during the quarter primarily related to an arrangement with an ASF customer that was modified. All orders for
sapphire material have been and will continue to be excluded from backlog going forward.
Business Outlook
The company expects that 2014 will be a transformational year, one in which it builds a sapphire materials business while
continuing to invest in the new technologies that will drive its equipment business in 2015 and beyond.
The company expects that revenue and profitability will be back end loaded, with its sapphire materials business ramping as
the year progresses, and with improving financial performance during the second half of 2014.
On an annualized basis, during 2014, the company expects revenues to range from $600 million to $800 million, with
approximately 15% of total revenues occurring in the first half of the year. The company expects that its sapphire segment will
account for more than 80% of total revenue in 2014. The sapphire segment includes the company's equipment and materials
businesses in the LED, industrial and consumer electronics markets.
During the first quarter of 2014, the company expects to generate revenues in the range of $20 million to $30 million with a
non-GAAP loss per share of $0.20 to $0.25.
Consolidated gross margins for 2014 are expected to be in the range of 25% to 27%, reflecting lower margin material
shipments during the year, inefficiencies related to the ramp up of the sapphire materials business and underutilization of the
company's equipment operations.
The company expects that 2014 non-GAAP earnings per share will be in the range of $0.02 to $0.18. This assumes an
average outstanding share count of 148 million shares.
The company's cash balance at year end is currently expected to be in the range of $400 million to $500 million.
Conference Call, Webcast
Today, Monday, February 24, 2014, at 8:00am ET, the company will host a live conference call with Tom Gutierrez, president
and chief executive officer, and Richard Gaynor, chief financial officer, to discuss its fourth quarter and full year 2013 results,
general business update and fiscal year 2014 guidance outlook.
The call will be webcast live and can be accessed by logging on to the "Investors" section of GT Advanced Technologies'
website, http://investor.gtat.com/. A slide presentation will accompany the call. The live call can also be accessed by dialing
(631) 291-4543. No password is required to access the webcast or call.
A replay of the call will be available for 90-days. To access the webcast replay please go to http://investor.gtat.com/ and select
the webcast replay link on the 'Events and Presentations' page. Or, please dial (404) 537-3406. The telephone replay will be
available through March 5, 2014 and requires the passcode 44370871.
Investor Financial Summary Document
A comprehensive summary of the company's financial performance can be found on the Investor Relations section of its
website on the "Q4 FY13 Earnings Call" webcast page. To access: http://investor.gtat.com.
Technology Day Event
Given the interest level in and importance of its new product developments, the company will be webcasting a New Product and
Technology Briefing on March 14, 2014 that will focus exclusively on our new product and technology initiatives. Additional
information regarding the webcast will be available later this week at http://investor.gtat.com/.
About GT Advanced Technologies Inc.
GT Advanced Technologies Inc. is a leading diversified technology company producing advanced materials and innovative
crystal growth equipment for the global consumer electronics, power electronics, solar and LED industries. Its technical
innovations accelerate the use of advanced materials, enabling a new generation of products across this diversified set of
global markets. For additional information about GT Advanced Technologies, please visit www.gtat.com.
GT Advanced Technologies Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(Unaudited)
December
31,
December
31,
2013
2012
$ 498,213
$ 418,095
1,330
--
12,377
23,829
Inventories
Assets
Current assets:
Cash and cash equivalents
Restricted cash
39,087
133,286
Deferred costs
2,977
30,248
Vendor advances
1,341
32,440
22,194
28,226
845
1,516
7,003
9,168
585,367
676,808
209,760
77,980
Restricted cash
93,419
--
95,943
90,516
Goodwill
54,279
48,021
162,075
111,343
$ 1,200,843
$ 1,004,668
$ --
$ 7,250
Accounts payable
77,303
44,848
Accrued expenses
39,115
30,928
234
4,901
Customer deposits
38,995
111,777
Deferred revenue
19,724
86,098
10,282
21,716
185,653
307,518
Other assets
Total assets
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt
Contingent consideration
--
132,313
Prepayment obligation
172,475
--
Convertible notes
283,914
157,440
33,023
24,459
Customer deposits
55,598
71,340
Deferred revenue
99,672
35,848
Contingent consideration
15,173
5,414
808
2,323
28,105
25,762
874,421
762,417
--
Common stock, $0.01 par value; 500,000 shares authorized, 134,463 and 119,293 shares issued and
outstanding as of December 31, 2013 and December 31, 2012, respectively
Additional paid-in capital
Accumulated other comprehensive income (loss)
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
--
1,345
1,193
353,777
183,565
1,259
806
(29,959)
56,687
326,422
242,251
$ 1,200,843
$ 1,004,668
Revenue
December
31,
September
28,
December
31,
December
31,
December
31,
2013
2013
2012
2013
2012
$32,570
$40,291
$102,333
$298,967
$733,536
Cost of revenue
29,531
22,514
143,491
205,920
527,132
Gross profit
3,039
17,777
(41,158)
93,047
206,404
26,967
21,075
22,695
83,006
70,649
Operating expenses:
Research and development
Selling and marketing
4,509
3,496
5,458
15,379
15,115
20,460
17,427
13,801
68,967
59,532
(2,116)
4,971
296
(1,119)
(8,965)
Impairment of goodwill
--
--
57,037
--
57,037
Restructuring charges
--
4,010
33,441
6,868
33,441
2,975
2,976
2,534
11,073
10,165
52,795
53,955
135,262
184,174
236,974
(49,756)
(36,178)
(176,420)
(91,127)
(30,570)
78
122
131
364
181
(11,370)
(6,456)
(5,957)
(31,832)
(9,355)
44
62
(34)
117
(1,002)
(61,004)
(42,450)
(182,280)
(122,478)
(40,746)
(19,238)
(4,304)
(22,871)
(35,832)
22,489
($41,766)
($38,146)
($159,409)
($86,646)
($63,235)
Basic
($0.33)
($0.31)
($1.34)
($0.71)
($0.53)
Diluted
($0.33)
($0.31)
($1.34)
($0.71)
($0.53)
Basic
126,049
122,183
119,109
122,481
118,931
Diluted
126,049
122,183
119,109
122,481
118,931
Interest expense
Other, net
the most directly comparable GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable
GAAP measures.
GT Advanced Technologies Inc.
Reconciliation of GAAP to non-GAAP results
(In thousands, except per share data)
(Unaudited)
2013
2013
2012
2013
2012
$32,570
$40,291
$102,333
$298,967
$733,536
29,531
22,514
143,491
205,920
527,132
3,039
17,777
(41,158)
93,047
206,404
Non-GAAP adjustments:
Write-down of inventory, vendor advances and PO cancellation
fees
943
19
71,754
1,499
71,754
2,488
--
2,520
2,488
2,520
$6,470
$17,796
$33,116
$97,034
$280,678
19.9%
44.2%
32.4%
32.5%
38.3%
December
31,
September
28,
December
31,
December
31,
December
31,
2013
2013
2012
2013
2012
($41,766)
($38,146)
($159,409)
($86,647)
($63,235)
2,975
2,976
2,534
11,073
10,165
4,797
4,555
2,084
18,680
15,176
434
371
945
1,893
1,550
943
19
71,754
1,499
71,754
Non-GAAP adjustments:
6,794
63
2,520
9,393
2,520
Impairment of goodwill
--
--
57,037
--
57,037
Restructuring charges
--
4,010
33,441
6,868
33,441
(2,116)
4,971
296
(1,119)
(8,965)
8,812
3,352
3,042
19,676
3,799
(13,402)
(1,539)
(32,354)
(24,053)
(35,349)
($32,529)
($19,368)
($18,110)
($42,737)
$87,893
($0.26)
($0.16)
($0.15)
($0.35)
$0.73
126,049
122,183
119,109
122,481
120,067
(1) The Company utilized the with and without method to determine the income tax effect on non-GAAP adjustments.
GAAP basis of approximately $140-$160 million; Company expects capital spending will be heavily weighted towards the first
half of the year; the company's cash balance at year end is currently expected to be in the range of $400 to $500 million; nonGAAP EPS for the year is expected to range from $.02 to $.18 per share, with the end result being primarily dependent on the
mix of equipment and materials business; the company expects to receive initial orders for Hyperion, SiC, HVPE and HiCz
during the year, revenue recognition will not likely occur until 2015 on the bulk of this business; the company expects to return
to profitability during the second half of 2014 with profitability is expected to be heavily weighted to the latter part of the year;
Company expects Non-GAAP EPS during the first quarter of 2014 is expected to range from a loss of $.20 to $.25. These
forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors,
many of which are outside the company's control, which could cause actual events to differ materially from those expressed or
implied by these statements. These factors may include the possibility that the company is unable to recognize revenue on
contracts in its order backlog and may not recognize any benefits from its arrangement with Apple. Although the Company's
backlog is based on signed purchase orders or other written contractual commitments in effect as of the end of our fiscal year
ended December 31, 2013, we cannot guarantee that our bookings or order backlog or our arrangement with Apple will result
in actual revenue in the originally anticipated period or at all, which could reduce our revenue, profitability and liquidity. Other
factors that may cause actual events to differ materially from those expressed or implied by our forward-looking statements
include the Company's ability to transition its business to being a sapphire material and equipment provider; Apple purchasing
sufficient quantities under its arrangements with the Company; the Company complying with the provisions of its arrangements
with Apple; the impact of continued decreased demand and/or excess capacity in the markets for the output of our solar
(polysilicon and photovoltaic) and sapphire equipment, general economic conditions and the tightening credit markets having
an adverse impact on demand for our products; increased trade tensions between the United States and China (and other
jurisdictions); the possibility that changes in government incentives may reduce demand for solar products, which would, in
turn, reduce demand for our polysilicon and photovoltaic equipment, technological changes could render existing products or
technologies obsolete, the Company may be unable to protect its intellectual property rights or may be subject to liability for
violating intellectual property rights of another party, competition from other manufacturers may increase, exchange rate
fluctuations and conditions in the credit markets and economy may reduce demand for the company's products and various
other risks as outlined in GT Advanced Technologies Inc.'s filings with the Securities and Exchange Commission, including the
statements under the heading "Risk Factors" in the company's quarterly report on Form 10-Q for the quarter ended September
28, 2013. Statements in this press release should be evaluated in light of these important factors. The statements in this press
release represent GT Advanced Technologies Inc.'s expectations and beliefs as of the date of this press release. GT
Advanced Technologies Inc. anticipates that subsequent events and developments may cause these expectations and beliefs
to change. GT Advanced Technologies Inc. is under no obligation to, and expressly disclaims any such obligation to, update or
alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
CONTACT: Media
Jeff Nestel-Patt
jnestelpatt@gtat.com
603-204-2883
Investor Relations/Analysts
Investor Hotline
investor.inquiry@gtat.com
866-957-8112